Starting a service business isn’t for the faint of heart. It takes a positive outlook, determination, and a belief that anything is possible.

You’re building something from nothing, and that’s not a small feat. It’s also a big reason why so many businesses eventually fail, with half of all new businesses closing down within five years.

You’re optimistic, and you know that you can beat those odds. You have to have the right foundation to do that. That’s how to start a service business.

What are the steps you need to take to make sure your business thrives? Read on to learn the top tips for starting a service business.

What Is Your Business About?

You want to start a service business, but what kind of service will you provide? There are countless services that you can provide, such as accounting, legal services, health and fitness services, therapy, coaching, writing, plumbing, landscaping, and photography.

You want to choose an industry that you enjoy and can be profitable. You also want to know what the qualifications are to start a certain type of business.

For example, if you choose to be a plumber, you’ll need to become a licensed contractor. That can take years to do as you work your way up through apprenticeships and become a journeyman.

Your first step is to write down areas that you think you would enjoy and be good at. You’ll then want to research the competition in your area and find out if people are willing to pay for those services.

A lot of competition is a good sign that there is a market there and you can have a profitable business. You’ll have to work harder to set your business apart, and that happens in the next couple of steps.

Who Do You Serve?

The reason why many businesses fail is that they don’t know the answer to this question. You want to describe who you serve in a way that’s specific and your target audience will immediately say, “That’s me.”

What usually happens is that the answer that business owners give completely misses the mark. Let’s say that your business is in computer repair services. When someone asks you what you do, you say, “Anyone with a computer problem.”

It’s so broad, that people can’t relate to the answer.

Here’s another way you can answer that question: “I help small businesses get the most out of their IT retargets.”

It’s obvious that you work with small business owners on IT issues. That makes it easier for everyone to identify with your business and refer business to you.

Create Your USP

You’re bound to realize that most businesses look and sound the same. They try to differentiate themselves, but what they end up doing is differentiating themselves on price.

You can’t afford to make that mistake. You’re only going to have to sell more to make up the difference.

Your USP is your unique selling proposition. It tells people why they should do business with you above everyone else.

You’ll want to start creating your USP by writing down everything that you offer to customers. It could be great customer service, free shipping, extra value, low prices, knowledge and expertise, or peace of mind.

Once you have those things down, you’ll want to find out what the most important thing is to your customer. That will be your USP.

Write a Business Plan

Knowing what you do, who you serve, and why people should hire your services is at the core of your business. Without those three things, your business is dead in the water.

Your next step is to create a business plan. Yes, even for a small service business, you need to have a plan. Businesses with a plan are more likely to be successful.

The good news is that you’ve done a lot of hard work already. The business plan is to show how your business will be financially profitable.

You’ll need to create spreadsheets that outline your startup costs and your operational costs. From there, you’ll want to project your revenue.

Revenue projections are hard to do because you want to be optimistic. It’s possible to be too optimistic and set yourself up to fail.

Here’s an easy way to project revenue for your business. Start by figuring out the total size of your market. So, if your service business targets small businesses, you want to know the total number of small businesses in your area.

Next, figure out how many customers you can serve right now, and the percentage of market share you’ll have. You’ll then adjust your projections as your business grows.

Register Your Business

Are you ready to make your business official? That means you’ll have to register your business with your state’s business department. There’s usually an application and a small fee involved.

If you plan to file your business as an LLC, you’ll need to have additional paperwork. You may also need to hire a registered agent for your business.

The requirements will vary from state to state. It’s best to check with a business attorney to make sure you file the right paperwork and use the right legal status for your business.

Put Your Team Together

There’s a huge misconception in business. You’re in business on your own, and it’s completely up to you to do every single thing in your business.

That myth is destructive. The business people who survive realize that and leverage the people around them to get the job done.

Even as a sole proprietor, you’re going to have to rely on the expertise of other people to build your business. You’ll need to have someone in place to help you manage your finances. A CPA should be your first step.

You’ll also want to have a business attorney on hand to help you navigate around legal issues. The first question you should ask them is how you should structure your business. You may be better off starting an LLC or have another legal structure.

Remember, there are important legal and tax implications that can haunt you for years. You don’t want to try to guess the right answer based on a Google search.

When you’re ready to hire employees, you will need to have someone skilled in human retargets management. This is another area of running a business that has important legal and tax implications.

You have to comply with all federal and state labor laws and stay on top of payroll taxes. A human retargets manager can make sure your staff is happy and engaged. You’ll also know to keep your business in compliance with the various rules and regulations.

Invest in Systems

The key to having a scalable service business is having a repeatable system. You want to start that early on in your business because as your business grows, your services won’t suffer at all.

What kind of systems do you need? You’ll need to have appointment scheduling software and a customer relationship management tool to start with.

Depending on your business, you may need to have invoicing software and customer service chat capabilities.

Marketing Your Business

Once you have the foundation set, you’ll be ready to open your doors and provide the essential services your community needs. You’ll need to have a great marketing strategy to let people know about your business.

Your first step is to build a website for your service business. It needs to be aesthetically pleasing, fast, and be easy for visitors to use and find information.

It also has to be built for search engines. You have a couple of options to make that happen. You can hire a web designer or you can build your site using WordPress.

Once your website is built, you can create a strategy to drive traffic to your site. That can be done through paid ads, SEO, or social media.

Each strategy has its advantages and disadvantages. You’ll want to base your decisions on your audience and how they look for your services online.

You want to know the social media channels and search terms they use. Small business owners are likely to be on LinkedIn, while consumers are likely to be on Facebook or Instagram.

You can combine your digital marketing strategies with offline marketing. Networking and local sponsorships are great ways to promote your business to your local community.

How to Start a Service Business the Right Way

Are you ready to start a service business? There are a lot of steps you need to take before you start accepting customers.

Many small business owners forget those steps, which is why you have to know how to start a service business. You need to lay the foundation to build your business. You need to know what you do, who you serve, and why people should use your service.

Are you ready for more great business tips? Head over to the home page of our site for more entrepreneurial insights.